Proofpoint acquires Cloudmark for $110M in cybersecurity consolidation play

As malicious groups continue to become more sophisticated in their hacking techniques, cybersecurity efforts are attempting to expand in their reach, and that is leading to some consolidation in the field.

As malicious groups continue to become more sophisticated in their hacking techniques, cybersecurity efforts are attempting to expand in their reach, and that is leading to some consolidation in the field. Today, cybersecurity firm Proofpoint -- which provides SaaS products to protect businesses' email, social media and other services -- announced that it would pay $110 million to acquire Cloudmark, another firm that provides security protection for messaging services, focusing specifically on serving the ISP and mobile carrier markets.

“We are excited to welcome Cloudmark’s ISP and mobile carrier customers to Proofpoint,” said Gary Steele, Chief Executive Officer of Proofpoint. “By combining the threat intelligence from Cloudmark with the Proofpoint Nexus platform, we can better protect all of our customers – both enterprises and ISPs – from today’s rapidly evolving threats.”

As we have said before, these days big data is the name of the game, and this deal is as much an acquisition to expand products and customer reach as it is to expand data sources to be able to analyse and combat malicious attacks more effectively. Cloudmark's Global Threat Network sources telemetry data from billions of emails and messages each day to help identify attacks, and as part of the deal, it will be rolled into Proofpoint's primary product, the Nexus platform.

Cloudmark is an old stalwart in the security space, founded in 2001. It had raised $39 million in funding from investors that included Nokia Growth Partners, Ignition Partners, FTVentures and Summit Partners. Proofpoint has been public since 2012 and currently has a market cap of over $4 billion. It said that the deal will increase its full-year revenue range by $20 million to $25 million to between $664 million and $673 million.

Getting its start originally in scanning email and helping block spam, Cloudmark later moved into other areas like identifying and blocking malicious SMS messages. The rising popularity of messaging applications (both native and downloaded apps) has made them a recurring target for malware and dodgy links, a trend that looks like it is not disappearing, and analysts estimate that there will be $5.5 billion spent by enterprises on messaging security products alone (apart from other security solutions) by 2022.

“Messaging has been the number one threat vector for years, but with ransomware and BEC, it’s never been a more urgent issue,” said Jason Donahue, Chief Executive Officer of Cloudmark, in a statement. “We’re thrilled to be continuing our work to fight advanced threats in messaging as part of Proofpoint.”

The transaction is expected to close in Q4 2017, pending regulatory approval, the companies said.